Tax residency rules, audits, and the severance record (2026)
2026.1 Edition · Revised 2026-07-25 · DomusDay Research
Moving out of Pennsylvania is easy. Stopping Pennsylvania taxes is a different act, and it happens on paper: Pennsylvania keeps treating you as a resident until the record shows otherwise.
On the burden of showing otherwise: A person asserting a change of domicile has the burden to prove the change: definite intention to discontinue the former domicile as the primary base of operations, definite intention to make the new location the primary base, and physical presence and abode there. The change dates from the first day of physical presence in the new location.
Two tests decide it. Cross 183 days with a Pennsylvania abode still available and you are taxed as a resident regardless of where you claim to live — and see day-counting rules. Or keep the day count clean but leave the life-pattern evidence pointing at Pennsylvania, and domicile does the same work. Everything on this page exists to answer one question: if DOR asks, does your record hold?
Social Security payments and distributions from eligible employer retirement plans after retirement age are never taxable as Pennsylvania compensation — a structural exclusion, not a deduction. For retirees arriving from New York or New Jersey, the state-level tax on that income drops to zero.
Source ↗Transfers at death are taxed by heir class: 0% to a surviving spouse, 4.5% to direct descendants and lineal heirs, 12% to siblings, and 15% to other heirs. Property owned jointly between spouses is exempt. Few destination states still impose one — it belongs in any move-in estate plan.
Source ↗Nearly every municipality and school district levies an Act 32 earned income tax, withheld at the higher of the resident or workplace rate — commonly around 1% combined. Philadelphia's wage tax runs separately: 3.735% for residents as of July 2026. The effective rate on wages depends on the address chosen.
Source ↗The exclusion reduces assessed value before school property tax is computed, and the application goes to the county assessment office by the March 1 preceding the tax year — a statutory deadline. A missed filing waits a full cycle for the next one.
Source ↗This is the test with a number in it, and the number is what an auditor can verify line by line. Keep any Pennsylvania dwelling suitable for year-round use and spend more than 183 days in the state, and Pennsylvania taxes all of your income — domicile arguments never enter into it. See day-counting rules: a morning meeting, a connection through the city with a dinner on the ground, a single evening — each is a full day against the threshold.
An individual domiciled elsewhere who maintains a permanent place of abode in Pennsylvania at any time during the tax year and meets the day count is taxed as a full-year resident, not a part-year resident. Days are counted midnight to midnight; no part-day counting convention is published. The department states the threshold as 'at least 183 days or more' on its Determining Residency page and as 'more than 183 days (midnight to midnight)' in the PA PIT Guide.
A house, apartment, dwelling place, or other residence that can be maintained as a household for an indefinite period, whether it is owned by the occupants or not. College dormitories, fraternity and sorority houses, employer-provided barracks, and temporary housing do not qualify as permanent places of abode.
Selling the apartment is not the test, and neither is the new driver's license. Pennsylvania presumes an established domicile continues until it is shown to have changed — the place where an individual, by present and voluntary intention, establishes a true, fixed and permanent home for the indefinite future — and it continues until the existing domicile is abandoned and a new one is acquired. On the burden: A person asserting a change of domicile has the burden to prove the change: definite intention to discontinue the former domicile as the primary base of operations, definite intention to make the new location the primary base, and physical presence and abode there. The change dates from the first day of physical presence in the new location. Examiners weigh 3 primary factors — home and abode, family, employment — and they weigh what you did, not what you intended. The pattern of an actual life somewhere else is the evidence; everything else is secondary.
A clean exit does not end every Pennsylvania claim. These rules keep taxing specific situations after the move — each one is a way the state stays in your return.
AffectsNJ→PA movers who keep New Jersey employment after the move
AffectsLeavers who keep Pennsylvania work days, a business, or rental property
AffectsAnyone whose domicile at death is unsettled, and leavers keeping Pennsylvania real estate
Pennsylvania Department of Revenue (DOR) runs a moderate-intensity residency program. The department publishes its residency tests and a domicile factor list of more than 25 items, but no residency-specific audit statistics and no published document checklist. An examination is not an argument about intentions — it is a request for documents, and the request looks like this:
Every item on that list either exists in your records from the year of the move, or it does not. That is the whole game — and why the severance record below is the section that matters most.
An audit years from now is answered with documents generated in the months around the move. This is that inventory — grouped the way examiners think about a life, each item paired with the evidence it leaves behind.
The biggest stake in the severance record is the estate, not the 3.07% income tax: domicile at death determines whether Pennsylvania's inheritance tax — 4.5% to lineal heirs, 12% to siblings, 15% to others — reaches everything, intangibles included wherever located, or only Pennsylvania-situs real estate and tangible property. On the income side, the change of domicile dates from the first day of physical presence in the new location, the PA-40 splits the year at that date, and a retained Pennsylvania abode plus 183 days keeps full-year resident treatment in play for the move year.
PennDOT directs departing residents to the destination state's licensing agency for the license transfer, and states that customers moving out of state are not eligible to record their change of address online. Driver's license location is on the department's domicile factor list.
Source ↗After the destination state issues new plates, PennDOT accepts the Pennsylvania plate back through the Bureau of Motor Vehicles Return Tag Unit in Harrisburg.
Source ↗A Voter Request to Cancel Voter Registration form, mailed to the former county election office, removes the Pennsylvania registration after an out-of-state move; voter registration status is an enumerated domicile factor.
Source ↗A retained Pennsylvania dwelling that can be maintained as a household for an indefinite period is a permanent place of abode — and with one, the 183-day statutory resident test stays live for every later year. Dormitories and temporary housing do not qualify.
Source ↗The homestead exclusion attaches only to an owner-occupied primary residence, so a home that stops being the owner's primary residence stops qualifying; school districts notify homeowners by December 31 when an approval lapses or is due to expire.
Source ↗Compensation earned in Pennsylvania by a nonresident remains subject to Pennsylvania tax unless the individual is a resident of Indiana, Maryland, New Jersey, Ohio, Virginia, or West Virginia — Florida is not on the list, so continuing Pennsylvania work days keep Pennsylvania withholding.
Source ↗Domicile at death decides whether the inheritance tax reaches the whole estate — all real and tangible property plus intangibles wherever located for a resident decedent — or only real estate and tangible personal property located in Pennsylvania for a nonresident. The severance record's largest stake is this one, not the 3.07% income tax.
Source ↗The locations of professional service providers — doctors, dentists, lawyers, accountants — appear on the department's domicile factor list; new-state providers create dated, located records on the arrival side.
Source ↗Religious affiliation and social organization participation are enumerated domicile factors, weighed by where they occur — no one item determines domicile; it is the weight of all facts.
Source ↗The department's factor list weighs where the necessities of life are purchased and where daily life is based — the physical move of belongings generates dated evidence of the new base of operations.
Source ↗Act 32 local earned income tax is keyed to the resident address: employees are required to provide notification of an address change on the Residency Certification Form, which moves resident-rate withholding off the old political subdivision from the change.
Source ↗With any retained Pennsylvania abode, the day count controls, measured midnight to midnight — and the change of domicile dates from the first day of physical presence in the new location.
Source ↗The move year is filed on the PA-40 with the part-year resident oval: all income for the resident portion of the year, plus Pennsylvania-source income for the nonresident portion.
Source ↗Every rule on this page traces to one of these. When a blog and a statute disagree, the statute wins — start here.
How these are chosen, what the automated gates catch, and what this site deliberately does not do: how these guides are made →
The year of the move is filed on PA-40, with income split between the resident and nonresident periods — and that return is itself evidence: it states your change date on a signed document. Compensation earned in Pennsylvania by a nonresident is subject to Pennsylvania withholding unless the individual is a resident of Indiana, Maryland, New Jersey, Ohio, Virginia, or West Virginia.
At a flat 3.07% on eight classes of income — unchanged since 2004 — with capital gains taxed at the same flat rate. Social Security and eligible employer retirement-plan distributions after retirement age are not taxed at all. Local earned income taxes apply on top: commonly around 1%, and 3.735% for Philadelphia residents.
A Pennsylvania driver's license within 60 days and vehicle title and registration within 20 days, with a Pennsylvania insurance policy; voter registration at least 15 days before an election; a Residency Certification Form so local EIT withholding follows the new address; the county homestead application by March 1; and a part-year PA-40 for the arrival year.
The NJ–PA reciprocal agreement routes wage withholding to the home state: a Pennsylvania resident working in New Jersey pays Pennsylvania's flat 3.07% on those wages instead of New Jersey's graduated rates. The employer withholds for Pennsylvania once the residency change is on file.
There is no separate state estate tax, but Pennsylvania levies an inheritance tax on transfers at death by heir class: 0% to a surviving spouse, 4.5% to direct descendants and lineal heirs, 12% to siblings, and 15% to other heirs, with jointly held spousal property exempt.
183, combined with an abode: a person domiciled elsewhere who is physically present in Pennsylvania 183 days of the tax year and maintains a permanent place of abode in the state at any time that year is taxed as a full-year resident. Days are counted midnight to midnight, and dormitories and temporary housing do not count as permanent places of abode.
Only for property without Pennsylvania situs. A nonresident decedent's real estate and tangible personal property located in Pennsylvania remain taxable at the same heir-class rates — 0%, 4.5%, 12%, 15% — while intangibles such as stocks and bank accounts stop being taxable once domicile is elsewhere. Domicile at death, not the mailing address, decides which regime applies — which is why the severance record's biggest stake is the estate.
2026.1 Edition · Revised 2026-07-25 · DomusDay Research